"How
much will we earn per year by the time the start-up goes public?"

(Particularly important for the investor in the
earliest stages of a lengthy start-up.)

If we put one dollar into
the bank, how much interest would it have to earn each year to be worth the
IPO price?

Percent Control

"How
much of the voting stock will we control after this round of financing?"

(More important for actively participating
investors than for others.)

What percent of the stock
of the company will be owned by investors versus management and employees
(counting all options as if exercised)?

Next
Rounds

"How
much room is left for the next round of investors if the start-up needs
another round? Will that be enough to attract them, especially if the
start-up gets into trouble? Will we be able to avoid a write-down of our
share price in the next rounds?"

(Most important for strategy in funding a
start-up that needs a lot of capital or one that has been disappointingly
long in going public.)

If we raise the price in
each successive round of funding by a ratio 2:1, can we hit the desired IPO
price?

Prior
Rounds

"Will
the pricing of this round make too high a profit for the last round since
they have invested?"

(New investors do not like windfall profits for
prior investors; instead, the new money tries to keep the markup of shares
below 3:1, boom periods can increase that ratio.)

Historical Multiplies

"Using
the start-up's historical financial statements, are the prices of this round
reasonable when compared to equivalent companies? How many times revenue
does this round represent?"

Future
Multiplies

"Using
forecasts of the start-up's financial statements, are the prices of this
round reasonable when compared to equivalent companies? How many times
revenue, profit, book value and cash flow does this round represent?"